Would "full and fair disclosure" by law schools alter the Bi

Of all the key institutional players in the legal ecosystem — law firms, clients, law schools — it is the law schools that might be most averse to change — at least in the opinion of Adam Smith, Esq. (a/k/a Bruce MacEwen). The role of law schools “in selecting, grooming and ‘certifying’ our talent pipeline” is profound, AS argues in a provocative blog post today — as is their responsibility for contributing to an untenable “arms race, which ends up leaving all involved impoverished and none better off.”

As part of a “terrible bargain that many schools struck during the boom years [ca. 1980 – September 15, 2008],” law schools, US News & World Report and law students have become engaged in a vicious cycle: In an effort to boost their US News ranking, law schools increase the amount they spend per student, which requires them to increase the tuition they charge per student, “leaving graduates with more and more student loan debt — which was OK so long as jobs were plentiful at BigLaw starting at salaries of $160,000.” However, as we all know, $160K BigLaw jobs are now far from plentiful.

AS chides law schools for their “misbehavior,” but has little expectation that they will change (“There’s one massively important reason to fear they will be the last to implement any serious reforms attempting to bring their operational practices into line with the New Normal. I offer you one word: Tenure.”).

In the absence of meaningful reform, however, we can at least require meaningful disclosure. Students who take on tens of thousands of dollars of debt for a law school education should have a realistic sense of their employment prospects. AS, therefore, offers a “modest proposal,” based on the SEC’s Rule 10b-5 (which, inter alia, prohibits the making of misleading statements or the omission of material facts in connection with the purchase or sale of a security). Under AS’s proposed “10b-5 Oath,” each law school would pledge to disclose:

Employment by sector (see AS post for detailed list of categories, from BigLaw to business to government to unemployment);

For all its alumni — as of graduation, and on the first, third and fifth anniversaries of their graduation;

Average student debt load at graduation.

Would such “full and fair disclosure” enable the market to “exercise its discipline,” as AS suggests? Perhaps. In any case, it’s hard to argue that access to such information would not benefit students.

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